"It's Official..No Priority Two Funding Available for 2014.2015" (08.27.14)

Yesterday, USAC started releasing denial letters for ALL Funding Year 2014 priority two funding requests. Priority two has historically funded internal connections, those components necessary to transport a data, voice, or video signal within the building to the classroom as well as basic maintenance of these components. USAC's move was not unexpected, as there was a more than

$1 billion shortfall to meet the demand for priority two funding requests at the 90% applicant level alone. Unfortunately this means that USAC has been unable to fund any priority two applications for two years in a row which is unprecedented in the 18-year history of the program.

The FCC is concentrating its focus on implementing E-rate 2.0 to start in Funding Year 2015 and how to sustain funding for the new Category Two ("C2") program, which will replace the historic priority two system. C2 will fund internal connections and basic maintenance for components that carry a broadband signal to the classroom, either wired or wireless. The FCC has identified a dedicated $1 billion budget for C2 in each of the upcoming funding years 2015 and 2016. Beyond that, the FCC is anticipating that various cost-cutting measures, including the phase-down of support for voice services, will create a more sustainable model for future C2 internal connections and basic maintenance.

We will continue to release updates on E-rate 2.0 over the next several months. For a detailed overview of E-rate 2.0 reform, we encourage you to review our two-hour recorded webinar "E-rate 2.0: The New Normal" which provides valuable details and insight on the changes of the program moving forward into 2015 and beyond. The webinar recording can be accessed here <https://www.youtube.com/watch?v=2EyOZClyQLk&noredirect=1> .

If you have any questions or concerns about your specific situation, please contact your CSM Consultants right away!

As always, we welcome your feedback and comments and if you have an idea for an alert or some other topic of discussion, be sure to pass it along to your dedicated CSM Team.